ABSTRACT
Exchange rate is a process in which a currency maybe converted into another. (Such as for the purpose of traveling to another country), or for engaging in speculation or trading in the foreign exchange market. There are enough variety of factors which influence exchange rates, such as interest rate inflation and the state of politics and the economy in such country also called rate of exchange or foreign exchange rate or currency exchange rate.We come across different transactions involving money in our everyday life, and every day the rate of exchange from one currency to the other appreciate and depreciate with different factors contributing to that. Some of these factors are economic, political or even disasters both natural and artificial. Different countries have different currencies they use for transaction, for example; Nigeria uses Naira and kobo, UK (England) Uses Pounds and sterling, America uses US Dollars etc. so with many other countries. In Nigeria Bureau de change is a body that is responsible for changing or converting one currency to the other, this body exists in banks in different part of Nigeria. Apart from the bank, currency conversion or exchange can also be done at local markets. Some individuals authorized and owned by the bureau or Banks also handle this currency conversion in the local markets. However, the body (Bureau de change) and individuals involved in this business face the challenge of computing or calculating the result of conversion and keeping record and track of change in the rate of conversion. These were done manually using calculator or books which are prone to errors. The development of computerize exchange rate computation system will enable reduce errors in conversion and calculation, keep track of conversion rates and reduce the mental stress of the doing the calculation manually.
CHAPTER ONE
1.0
INTRODUCTION
Exchange rate is a process in
which a currency maybe converted into another. (Such as for the purpose of
traveling to another country), or for engaging in speculation or trading in the
foreign exchange market. There are enough variety of factors which influence
exchange rates, such as interest rate inflation and the state of politics and
the economy in such country also called rate of exchange or foreign exchange
rate or currency exchange rate. An exchange rate between two
currencies is the rate at which one currency will be exchanged for another. The amount of one currency that a person or institution
defines as equivalent to another when either buying or selling it at any
particular moment.
1.1 BACKGROUND OF STUDY
We come across different transactions involving money in our
everyday life, and every day the rate of exchange from one currency to the
other appreciate and depreciate with different factors contributing to that.
Some of these factors are economic, political or even disasters both natural
and artificial. Different countries have different currencies they use for
transaction, for example; Nigeria uses Naira and kobo, UK (England) Uses Pounds
and sterling, America uses US Dollars etc. so with many other countries.
In Nigeria Bureau de change is a body that is responsible for
changing or converting one currency to the other, this body exists in banks in
different part of Nigeria. Apart from the bank, currency conversion or exchange
can also be done at local markets. Some individuals authorized and owned by the
bureau or Banks also handle this currency conversion in the local markets.
However, the body (Bureau de change) and individuals involved
in this business face the challenge of computing or calculating the result of
conversion and keeping record and track of change in the rate of conversion.
These were done manually using calculator or books which are prone to errors.
The development of computerize exchange rate computation system will enable
reduce errors in conversion and calculation, keep track of conversion rates and
reduce the mental stress of the doing the calculation manually.
1.2 STATEMENT OF THE
PROBLEMS
The Computation of Exchange Rate is done manually. The
weaknesses associated with this method include:-Time wasting to Compute
Records, Improper communications and filing of documents
Most of records and other documents are being damaged
and eaten up by insects, and rats.
Consequently, this project intends to develop a system
that will minimise these weaknesses.
1.3 AIMS AND OBJECTIVES
Since this research is aimed at computerizing the manual
exchange rate conversion used by the
Bureau de change in banks and their outlets in the local market, it is expected
that the computerize exchange rate conversion system offer some benefits that
the manual one could not offer, these benefits forms the objectives of this
research work
Some of the objectives of this new system are:
i.
To
evolve to a computer-based method, this will help to speed up the rate of
exchange conversion.
ii.
To
reduce the mental stress of performing exchange rate conversion from one
currency to the other manually.
iii.
To
eliminate the problem of miscalculation encountered during manual exchange rate
conversion.
iv.
To
monitor, control and manage the rate of each currency conversion automatically
from the backend.
1.4 SIGNIFICANCE
OF THE PROJECT
Before now, the Bureau de change in different banks in
Nigeria and their outlets have been doing manual exchange rate conversion, the
outlets at the local markets can only know the exchange rates of different
currencies from the bank before fixing their own rate for customers or clients,
the bureau de change themselves can monitor the exchange rate of different
currencies online but no software to set their own rate of conversion and
perform the calculation automatically.
However, with the introduction of computerize exchange rate
computation System, conversion is made easy and the bureau and their outlets
can set their own rate of exchange which will automatically reflect in the
transactions they will perform, its fast, easy and saves time.
1.5 SCOPE
OF THE STUDY
The scope of this study shall specifically concentrate on
ascertaining the activities Exchange rate. And it understudies the Nigerian
exchange Market, and it specifically focuses on the application of computer on
their mode of operation
1.6 LIMITATIONS OF
STUDY
During the time of carrying out this work, the researcher
encountered some problems of which restricted her to only above mentioned area,
some of the limitations include:
i.
TIME CONSTRAINT: The time allocated to research work for this study was
greatly constrained due to intense academic activities involving the
researcher.
ii.
Lack
of textbooks and library facilities.
iii.
FINANCE
–The major constraints for this study occurred in the form of inadequate funds.
The present high cost of material, access to a personal computer
unit for running and debugging of the application program, transportation
expenses to and fro the site of computer etc. militated against the smooth and
easy advancement of the work.
1.7 DEFINITION OF TECHNICAL TERMS
1.
COMPUTATION: Mathematical calculation or the use of computers, especially as
subject of research.
2.
CURRENCY: A system of money in general use in
a particular country. Example: Naira in Nigeria.
3.
EXCHANGE RATE: The value of one currency for the
purpose of conversion to another.
4.
FOREX TRADE: This is the
buying and selling of currencies at different rates.
5.
SOFTWARE: Is the general name for all programs
(Instructions, Data and Document) that are executable by the computer system in
order to produce the desired results.
6.
SPOT EXCHANGE
RATE
- The spot rate is the rate for a currency at today’s market prices
7.
FORWARD EXCHANGE
RATE - A
forward rate involves the delivery of currency at a specified time in the
future at an agreed rate. Companies wanting to reduce risks from exchange rate
volatility can buy their currency ‘forward’ on the market
8.
EFFECTIVE
EXCHANGE RATE INDEX (EER) - A weighted index of sterling's value against
a basket of currencies the weights are based on the importance of trade between
the UK and each country.
9.
REAL EXCHANGE
RATE
- This
is the ratio of domestic price indices between two countries. A rise in the
real exchange rate implies a worsening of competitiveness for a country.